Economic and Labour Situation in Japan, December 2022
RENGO Decides on Policy to Demand 5% for 2023 Spring Struggle
RENGO (Japanese Trade Union Confederation) held a meeting of its Central Committee on December 1 to determine its policy for the 2023 spring struggle for the betterment of livelihood (Shunto). As its policy, RENGO has decided on wage demands totaling around 5%, consisting of a basic raise of around 3% plus the regular wage hike based on seniority. For the past seven years, Rengo had requested increases of around 4%. This year’s request, the highest since a range of 5−6% was sought in 1995, reflects tepid wage growth over the past decades in Japan that has hardly kept up with soaring inflation.
President Tomoko Yoshino said, “Workers in Japan are faced with the triple trouble of higher prices, the yen’s drop, and the coronavirus crisis. The management side must surely raise wages of all workers to prevent consumer spending from falling amid the rising cost of living”.
RENGO argues that if wage increases cannot keep pace with price growth for a prolonged period of time, there is fear that consumer spending will plunge and a serious recession may be unavoidable.
RENGO also places emphasis on improving the hourly wages of non-regular workers, such as part-time workers. The organization is demanding that the minimum hourly wage should be set at 1,150 yen (approx. US$8.5).
Prime Minister Fumio Kishida has repeatedly called on companies to raise wages to keep pace with rising prices.
As for the Bank of Japan, Gov. Haruhiko Kuroda is adamant about maintaining the BOJ’s ultra-loose monetary policy. Kuroda has stressed that the BOJ’s monetary easing is necessary to help companies increase wages and achieve healthy inflation.
Labour Force Survey Monthly Results1
The number of employed persons in October 2022 was 67.55 million, an increase of 500,000 over the same month the previous year. By gender, this included 37.02 million men, up 10,000, and 30.53 million women, up 49,000 from the previous year, respectively.
The number of unemployed persons in October 2022 was 1.87 million, a decrease of 70,000 from the same month in the previous year, for the thirteenth straight monthly decline. The seasonally adjusted unemployment rate in October was 2.6%, up 0.1% over the previous month. The unemployment rate for men was 2.8%, up 0.1% over the previous month, and 2.4% for women, up 0.1% over the previous month.
|Population aged fifteen and over||11,037||-37||-0.3|
|Not in labour force||4,095||-80||-1.9|
|Labour force participation rate (%)||62.8||0.8||–|
|Employment rate (%)||61.2||0.8||–|
|Unemployment rate, original series(%)||2.6||-0.1||–|
|Current month||Change from
|Unemployment rate, seasonally adjusted(%)||2.6||0.0|
(3) Job Availability
Japan’s job availability in October stood at 1.35, up 0.01 over the previous month, showing an improvement for the 10th straight month with the economy continuing to recover from the coronavirus pandemic led by the service sector, meaning there were 135 job openings for every 100 job seekers. The ratio of regular employee job offers to applicants was 1.03, unchanged from the previous month. The ratio of new job offers to applicants, a leading indicator for the labour market, was 2.33, up 0.06 over the previous month. The number of job offers in the accommodation and food service sectors climbed 29.3% over the same month in the previous year, followed by an 11.7% increase in the wholesale and retail sector.
Industrial Production 2
Japan’s industrial output in October decreased 2.6% from the previous month, for the second straight month of decline, mainly due to weak overseas demand amid economic slowdowns in China and elsewhere. By sector, semiconductor manufacturing devices and flat panel display-producing equipment saw the biggest plunge of 5.4% from the previous month. Electronic parts and devices saw a decrease of 4.1%.
Production, shipments, inventories, and inventory ratio decreased.
The industries that mainly contributed to the decrease were as follows: (1) production machinery; (2) electronic parts and devices; and (3) chemicals (excl. inorganic, organic chemicals, and medicines), in that order.
According to the Survey of Production Forecasts in Manufacturing, production was expected to increase by 3.3% in November and increased by 2.4% in December.
|Seasonally adjusted index||Original index|
|Index||Change from previous month (%)||Index||Change from previous year (%)|
Family Income and Expenditure Survey 3
(1) Expenditure of Households of Two Persons or More
Average monthly consumption expenditure of households of two or more persons in October was 298,006 yen, up 5.7% in nominal terms and up 1.2% in real terms from the previous year, increasing for the fifth straight month. By component, spending on fuel, lighting, and water utility charges rose 17.1% and clothing & footwear rose 17.8% in normal terms from a year earlier.
(2) Income and Expenditures for Workers’ Households
Average monthly income per household stood at 568,282 yen, up 3.5% in nominal terms but down 0.9% in real terms from the previous year. The average level of consumption expenditure was 328,684 yen per month, up 5.1% in nominal terms and up 0.7% in real terms year-on-year.
Consumer Prices 4
Consumer prices rise 3.7% – the fastest in 4 decades
The consumer price index (CPI) in October was 103.7 (2020 = 100), up 3.7% over the previous year and up 0.6% over the previous month, driven by higher commodity prices and a weak yen. Core inflation (CPI less food and energy) was up 2.5% over the previous year, marking the seventh straight month of increase. Energy prices surged 15.2%, with kerosene, city gas, and electricity bills all marking double-digit gains. Food prices, excluding fresh food items, rose 5.9%, the largest increase since March 2015 as many companies went ahead with price hikes in October.
The BOJ has taken the view that the recent bout of inflation should only be temporary, because it is mainly due to higher energy and raw materials costs and exacerbated by the weakening of the yen.
|All items, less fresh food||103.4||3.6||0.5|
|All items, less fresh food and energy||101.7||2.5||0.5|
- Source: Labour Force Survey Monthly Results (Statistics Bureau of Japan)
- Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry)
- Source: Summary of the Latest Month on Family Income and Expenditure Survey (Statistics Bureau of Japan)
- Source: Consumer Price Index (Statistics Bureau of Japan)